New research has found that the delay to IR35 has resulted in a third of hirers making a U-turn on blanket bans for PSC’s when implementing the IR35 rules.

The study suggests that the extension to the introduction of the Off-Payroll rules has encouraged more employers to move away from HMRC’s widely criticised determination tool (CEST) and give more reasoned decisions.

According to it’s findings, 31 per cent of respondents revealed they were using CEST in the run-up to April 2020, but just 18 per cent plan to use it in future.

Instead of using the Government’s own tool, 71 per cent of participants indicated that they would now only use a tool that’s backed up by insurance. The reason for this decision was that the extension provided more time to better protect the entire recruitment chain.

As well as changing their approach to IR35 decisions, a further 79 per cent of the businesses surveyed cited having developed a dedicated policy that covers the end client as a high priority.

It’s very encouraging to see so many employers reversing the blanket bans that were originally imposed and it is hoped that more will follow suit as organisations begin working with staffing companies to prepare in order to get it right this time around.

With contractors likely to play a larger role in the UK economy over the coming years as companies seek flexible resources in a changing market, it is more important than ever that vigorous processes are put in place that allow contractors to be engaged in a compliant manner.

While the introduction of the IR35 rules is still many months away, it is important that you prepare now for these important changes.